In 1942, the Economist added a special section for detailed coverage of the United States. Seventy years later, the next special section appears: China. “The main reason is China’s rise to economic superpower status, but we are also fascinated by the politics of a country that is out of step with global norms.” The magazine believes that “if China’s rise is to continue, the Communist Party needs to loosen its grip on society and the economy.”

In 1942, the Economist added a special section for detailed coverage of the United States. Seventy years later, the next special section appears: China. “The main reason is China’s rise to economic superpower status, but we are also fascinated by the politics of a country that is out of step with global norms.” The magazine believes that “if China’s rise is to continue, the Communist Party needs to loosen its grip on society and the economy.”

“The euro needs to see a sharp fall of at least 30%, bringing it into line with the US dollar, or else the eurozone is ‘doomed.’” That warning came from economist Nouriel Roubini. He believes a major drop in the currency is the only way to “restore stability and competitiveness” in Europe.

Investment Week (January 26, 2012)
“The euro needs to see a sharp fall of at least 30%, bringing it into line with the US dollar, or else the eurozone is ‘doomed.’” That warning came from economist Nouriel Roubini. He believes a major drop in the currency is the only way to “restore stability and competitiveness” in Europe.

“The euro fell sharply on the foreign exchanges today after the legendary speculator George Soros said that growing economic and political tensions could destroy the European Union.” At the World Economic Forum in Davos, other economists have added their voices to his warnings. Soro’s said, “Unfortunately, the European authorities had little understanding of how financial markets really work, and did everything wrong.” He pointed out that Greece is now on the verge of default.

“The Web site Mega­upload was a 21st-century success story, with 50 million daily visitors and $175 million in profits.” But the U.S. Department of Justice shut down Megaupload’s site. Several of its executives have been arrested. They stand accused of operating the largest copyright infringement scam in U.S. history, with potential loss to copyright owners of $500 million. Ultimately, “Megaupload shows online copyright protection is needed.”

The concept of limited liability, which protects shareholders, “is one of the greatest wealth-creating inventions of all time.” In many places, however, companies can be set up to hide or disguise the ultimate owners. “This is of great use to wrongdoers, and a huge headache for those who pursue them.” Both the World Bank and the OECD argue that the identities of owners should be disclosed. The Economist agrees. “Anyone registering a limited company should have to declare the names of the real people who ultimately own it, wherever they are, and report any changes. Lying about this should be a crime.”

The concept of limited liability, which protects shareholders, “is one of the greatest wealth-creating inventions of all time.” In many places, however, companies can be set up to hide or disguise the ultimate owners. “This is of great use to wrongdoers, and a huge headache for those who pursue them.” Both the World Bank and the OECD argue that the identities of owners should be disclosed. The Economist agrees. “Anyone registering a limited company should have to declare the names of the real people who ultimately own it, wherever they are, and report any changes. Lying about this should be a crime.”

“Run up spending and debt, raise taxes in the naming of balancing the budget, but then watch as deficits rise and your credit-rating falls anyway.” The Journal describes not a European country, but the State of Illinois, which was just downgraded by Moody’s to A2, the worst rating of all 50 states. Among other problems, Illinois “has $6.8 billion in unpaid bills and unaddressed obligations” and a pension fund which covers less than half of its projected liabilities.

“Run up spending and debt, raise taxes in the naming of balancing the budget, but then watch as deficits rise and your credit-rating falls anyway.” The Journal describes not a European country, but the State of Illinois, which was just downgraded by Moody’s to A2, the worst rating of all 50 states. Among other problems, Illinois “has $6.8 billion in unpaid bills and unaddressed obligations” and a pension fund which covers less than half of its projected liabilities.

“The death toll from the brutal 10-month war by President Bashar al-Assad of Syria against his own people is now more than 5,400…. The international community needs to exert whatever diplomatic and economic pressure it can to make clear to Mr. Assad and his cronies that their time has run out.”

“Chi-X Japan numbers have shot up significantly since the beginning of the year.” In the fourth quarter, Chi-X Japan increased trades by 50.4%, though it still handles less than 3% of Japan’s trading, most of which remains on the Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE). Chi-X is also gaining traction in Australia and Canada, where it now accounts for roughly 11% of trades. In combination with the Singapore Exchange (SQX), Chi-X also operates a Pan Asian dark pool, Chi-East, which “supports trading of 3,264 securities including all Hong Kong main-board listed shares.”

Will China’s landing be soft or hard? Several factors “help offset weakness and support the ‘soft landing’ thesis.” Urbanization is one such factor, as it helps boost retail sales. In 2011, “China’s urban population surpassed its rural population” with 51.3% living in cities. “Combine more city dwellers with rising incomes and you get the beginnings of the coveted transition from a purely export-based economy into a dynamic domestic/international machine.”

“Great power shifts are accompanied by changes in the global reserve currency.” Might China eclipse London? Quite possibly, but not until the renminbi becomes fully convertible. “The reality is that the renminbi market will remain undeveloped so long as foreign holders remain heavily restricted in what they can do with their renminbi.”